Martz v. Hills Materials
| Decision Date | 10 December 2014 |
| Docket Number | No. 27022.,27022. |
| Parties | Michael MARTZ, Appellant, v. HILLS MATERIALS d/b/a Hills Products Group, Inc. and Western National Mutual Ins. Co., Appellees. |
| Court | South Dakota Supreme Court |
Michael J. Simpson, Julius & Simpson, LLP, Rapid City, South Dakota, Attorneys for appellant.
Eric C. Blomfelt, Eric C. Blomfelt & Associates, PC, Denver, Colorado, Attorneys for appellees.
[¶ 1.] In 2000, Michael Martz injured his shoulder while working at Homestake Mining Company and was paid workers' compensation benefits. In 2002, Martz injured the same shoulder while working for a subsequent employer, McLaughlin Sawmill (Hills Materials). Hills Materials began paying but later denied further benefits. We address two questions. First, whether Hills Materials was equitably estopped from denying liability after four years of paying benefits. Second, whether Hills Materials remained liable for benefits when its physicians opined that the prior Homestake injury was a “major contributing cause” of Martz's current condition, but Martz's physician opined that the subsequent Hills Materials injury “contributed independently” to his current condition.
[¶ 2.] Michael Martz was employed by Homestake, which was self-insured for workers' compensation. In February 2000, Martz suffered a work-related injury to his left shoulder. The claim was accepted as compensable by the administrator of Homestake's workers' compensation program. Martz had rotator cuff surgery in November 2000. His shoulder related medical bills and impairment rating were paid by Homestake.
[¶ 3.] Martz left Homestake and began working in construction performing odd jobs for the next two years. He then began working for Hills Materials, which was insured by Western National Insurance (Western). In November 2002, during the course of his employment with Hills Materials, Martz felt a “pop” in his left shoulder while moving a log. He incurred pain following this incident, and Dr. Wayne Anderson became Martz's treating physician. Dr. Anderson also gave Martz an impairment rating in 2003. Western accepted the 2002 injury as compensable and began paying benefits.
[¶ 4.] Martz was authorized to return to work approximately six to eight weeks after the 2002 injury. However, his employment at Hills Materials terminated. For the next four years, Martz's employment involved maintenance work for Historic Bullock Properties in Deadwood.
[¶ 5.] In July 2005, while Martz was employed for Historic Bullock Properties, Hills Materials engaged Dr. Jeffrey Luther to perform an independent medical evaluation (IME) of Martz's then-existing condition. Dr. Luther opined that the prior injury at Homestake was a “major contributing cause” of Martz's then-existing pain and need for treatment. Based on that opinion, Hills Materials denied further benefits on August 9, 2005.
[¶ 6.] Homestake then requested a causation opinion from Dr. Anderson. On October 25, 2005, Dr. Anderson responded by referring to his 2003 impairment rating. Dr. Anderson noted that in 2003, he had assigned a 10% impairment as a result of the 2000 injury at Homestake and a 5% impairment as a result of the 2002 injury at Hills Materials. Without further explanation, Dr. Anderson opined that Martz's 2002 injury at Hills Materials “contributed independently to [Martz's] left shoulder condition and [then-existing] need for treatment.” Because this opinion suggested that the 2002 injury at Hills Materials played causative role in Martz's then-existing condition, on November 8, 2005, Homestake also denied liability for further benefits. Martz continued to see Dr. Anderson for complaints of pain, and Martz continued taking pain medication.
[¶ 7.] In February 2006, Hills Materials, through Western, asked Dr. Anderson to clarify his opinion regarding the 15% impairment rating. Dr. Anderson was asked whether the 10% component included impairment for any range of motion limitations. He was also asked if Martz's range of motion measurements changed before and after the 2002 injury. Dr. Anderson did not answer the latter question. He did, however, explain that the surgery following the 2000 injury qualified Martz for the 10% impairment “with normal range of motion,” and the 5% impairment “was due to range of motion loss.”
[¶ 8.] At about the same time (January 2006), Martz decided to pursue his workers' compensation claim against Hills Materials/Western. Martz's attorney requested that Hills Materials/Western be responsible for the 5% impairment rating, for certain identified medical expenses, and for other medical bills that had “not been paid.” The next month, Martz's attorney followed up with a letter to Western to confirm a phone conversation in which Western, according to the letter, agreed that it was “going to be paying the medical bills that [Martz's attorney] provided [Western.]” Martz's attorney requested Gay Buchholz, Western's adjuster, to send a letter retracting its denial of benefits and agreeing to pay the outstanding medical bills. On March 31, 2006, Martz's attorney followed up with an additional letter stating: “I understand that you are going to be taking care of this man's medical bills for treatment of his shoulder injury.” On May 10, 2006, Martz and the Western adjuster signed a Memorandum of Payment for Permanent Partial Disability for the 5% impairment. Western also restarted paying for treatment of Martz's left shoulder, and Western continued to do so until 2009.
[¶ 9.] By 2009, Martz had been employed by two additional employers. Consequently, in August 2009, Hills Materials, through Western, asked Dr. Anderson “to clarify if [Martz's] ongoing work activities (since 2002) have aggravated his left shoulder.” Dr. Anderson referred to his 2003 impairment rating and noted that Martz had sustained no new injuries. Dr. Anderson opined that the 2002 Hills Materials injury remained “the cause of [Martz's] left shoulder impingement and need for treatment as well as his current need for physical therapy.”
[¶ 10.] Hills Materials apparently questioned Dr. Anderson's opinion because it then engaged Dr. Jerry Blow to perform an IME. Following that examination in November 2009, Dr. Blow, like Dr. Luther, opined that Martz's pain and need for treatment remained the result of the original 2000 injury at Homestake. Dr. Blow explained that the second injury in 2002 at Hill's Materials only caused “a temporary aggravation of his preexisting left shoulder conditions,” and that “in large part [Martz's current] condition [was] related to the original injury in 2000 [at Homestake].” Based on this opinion, Hills Materials/Western denied further benefits.
[¶ 11.] Martz subsequently petitioned the Department of Labor, contending that both employers were liable for benefits. Homestake was granted summary judgment because the statute of limitations for claims against it ran in 2007. Martz did not appeal that ruling.
[¶ 12.] With respect to Hills Materials, the Department ruled on the two issues that are presented in this appeal. First, the Department rejected Martz's argument that promissory estoppel precluded Hills Materials from denying liability. The Department acknowledged that Western had paid benefits and medical expenses from 2006 to 2009, and that Martz's attorney wrote Western letters confirming conversations in which Western allegedly agreed to pay the benefits that were at issue at that time. The Department, however, concluded that promissory estoppel did not apply. The Department found that Western did not promise to pay benefits indefinitely into the future. The Department further found that Martz could not have reasonably expected such a promise. The Department finally found that Western could not have reasonably expected to believe that Martz would not protect his interests by preserving a timely claim against Homestake.
[¶ 13.] Second, based on medical records and depositions, the Department adopted Dr. Luther's and Dr. Blow's opinions over Dr. Anderson's. The Department found that Martz failed to satisfy his burden of proving Hills Materials liable by showing that the 2002 injury was a “major contributing cause” of his current condition. The Department acknowledged that Dr. Anderson was Martz's treating physician, but the Department found that Dr. Anderson's opinion lacked analysis. In contrast, the Department noted that Drs. Luther and Blow supported their opinions with objective medical evidence. The circuit court affirmed the Department's decision on causation and promissory estoppel, and Martz appeals.
[¶ 14.] Our standard of review is governed by SDCL 1–26–37. Vollmer v. Wal–Mart Store, Inc., 2007 S.D. 25, ¶ 12, 729 N.W.2d 377, 382. The agency's findings are reviewed for clear error. Id. However, findings based on documentary evidence, such as depositions or medical records, are reviewed de novo. Id. Questions of law are also reviewed de novo. Kuhle v. Lecy Chiropractic, 2006 S.D. 16, ¶ 16, 711 N.W.2d 244, 247.
[¶ 15.] Martz argues that Hills Materials was estopped from denying liability. Martz contends that in early 2006, Western promised to continue to pay his medical bills. Martz further contends that based on that promise, he altered his position to his detriment—he allowed the statute of limitations to run on his claim against Homestake.
[¶ 16.] “Promissory estoppel may be invoked where a promisee alters his position to his detriment in the reasonable belief that a promise [will] be performed.” Garrett v. BankWest, Inc., 459 N.W.2d 833, 848 (S.D.1990). In addition to a promise: “(1) the detriment suffered in reliance must be substantial in an economic sense; (2) the loss to the promisee must have been foreseeable by the promisor; and (3) the promisee must have acted reasonably in justifiable reliance on the promise made.” Id.
[¶ 17.] Martz argues that in 2006, Western promised to abandon its claim...
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